Buy Microsoft Before it Stuns Apple and Google

Windows 8 and Xbox will make Microsoft the first cross-platform power.

NEW YORK ( TheStreet) -- Microsoft ( MSFT) released its preview of the new Windows 8 operating system last week.

Even if you do not download it, pay attention to the coverage. Windows 8 could change the game in several areas.

Despite Apple's ( AAPL) social cachet, Microsoft still enjoys a commanding lead, as Windows remains the dominant operating system on desktops and laptops. And it seems the company has finally decided to join the cross-platform world. This could spell trouble or, at the very least, give Apple and Google ( GOOG) a formidable competitor in the mobile space.

As Nick Bilton explained over the weekend in The New York Times, while Apple and Google own the mobile space, Microsoft actually has a commanding lead in another crucial area:

Microsoft has something Apple and Google must envy. It has sold 67 million Xbox 360 video game consoles and has more than 40 million Xbox Live members. According to Frank Shaw, Microsoft's vice president for corporate communications, video consumption has grown by 140% each year on the Xbox since 2008.

Apple and Google have the name as innovators, but, clearly, Microsoft still knows how to play the game. Xbox did not emerge as a full-fledged streaming service by accident. And you cannot blame happenstance for what's about to happen: The combination of Windows 8 and Xbox will connect your mobile devices -- smartphones and tablets -- to not only your PC, but, maybe more importantly, your television screen.

Relative to Xbox, Apple TV and Google TV are abject failures. There's an obvious reason: Gaming leads the way on Xbox. You fire up your Xbox to play Tiger Woods PGA Tour and you realize, whoa, this thing does everything any other streamer can do and more. When you stop and think about it, it's really the most brilliant innovation that investors, swept up by Apple euphoria, largely ignore.

Well-positioned to win the battle for the living room -- or at least continue to establish itself as the leader -- it will be interesting to see what Microsoft does from a mobile standpoint. While most talk has centered on smartphones, particularly the firepower Microsoft and AT&T ( T) have put behind Nokia's ( NOK) Lumia, the tablet space might end up an equally as interesting battleground.